Answer:
More , High ( D )
Explanation:
As far as GOODS (compared to services) are concerned, there is More opportunity to correct problems due to High customer contact.
and this is because when dealing with Services instead of Goods the direct customers of services are people hence the level of accessibility to enable the prompt correction of problems that might arise is very high and its faster as well to do that
Answer:
Dr Cash $92,811
Cr Notes Payables $92,811
(Being the proceeds and issuance of note
Explanation:
Annual rate = 12%
Interest for 9 months will be:
9/12 x 12% = 9%
So disbursal is 9% x $92,811
= $8,353
Principal (borrowed money) is $92,811.
The loan was disbursed on January 1. So it's only the proceeds from the loan which will be recorded on this date. Repayment will start at later date.
Therefore, The entry made by Guarantee Company on January 1 will be:
January 1
Dr Cash $92,811
Cr Notes Payables $92,811
(Being the proceeds and issuance of note)
The risk of default is measured by bond ratings, with the
higher the rating the lower the risk of default, so The higher the rating, the
lower the interest rate an investor will receive and the lower the risk that
the issuer of the bond will default.
Answer:
The value of the six-month European call option is 6.96
Calculations:
After 6 months the option value would be either $12 (for stock price of $60) or $0 (for stock price of $42).
Let us consider a portfolio of
+Δ shares
-1: option
The value of this portfolio is either 4Δ or (60Δ - 12) in 6 months.
Now,
if 42Δ = 60Δ - 12,
then,
Δ = 0.6667
The value of the portfolio is 28 (60×0.6667 - 12).
The portfolio is risk-less for this value of Δ.
Current value of the portfolio = 0.6667×50 - f, where f is the value of the option.
As the portfolio must earn the risk-free rate of interest
Thus,
(0.6667×50 - f) 
= 28
Or
f = 6.96
Let p be the probability of an upward stock price movement in a risk neutral world.
Therefore,
60*p + 42*(1 - p) = 50*
Or
p = 0.616212629
The value option in a risk neutral world is
12*0.6161 + 0*0.3839c = 7.3932
which has a PV of 
= 6.96
